Examination of Witnesses (Questions 62-79)
MR DARREN
HENLEY, MR
SIMON COOPER,
MS LISA
KERR AND
MR KEVIN
STEWART
27 FEBRUARY 2007
Q62 Chairman: Good morning, everybody.
This is the second session of the Committee's inquiry into the
future of public service media content and in the first session
this morning we are going to be focusing particularly on radio.
Therefore, I would like to welcome to the Committee Darren Henley,
from Classic FM, Simon Cooper, who is the consultant to GCap,
Kevin Stewart, the Chief Executive of Tindle Radio, and Lisa Kerr,
from the RadioCentre. If I can begin. In their statement, Radio—Preparing
for the Future, Ofcom have set out a number of public purposes
for radio. Do you accept the definition, which they set out, of
the nature of public service programming on radio and is it necessary
to impose it, or require it, by licence, or is it the case, as
GCap have argued, I think, that actually commercial radio provides
public service voluntarily?
Ms Kerr: I think we accept that
they are a useful summary of the public purpose that radio can,
and does, provide and we would want to urge your Committee to
recognise commercial radio's importance in delivering those public
purposes. As to whether or not they should be required, I think,
probably, as an industry, we have a general acceptance that it
is reasonable to expect broadcasters to provide public purpose
benefit but perhaps not to prescribe how that should be provided.
Mr Cooper: I think, Chairman,
it is the voluntary nature of what we do that makes it so vibrant
and I think if you try to define it too tightly, and if you try
to prescribe it too tightly, then you go down the wrong route
sometimes: better to have the decisions made closest to the listeners.
Mr Henley: There are many examples
in both local and national radio. Our business is about giving
listeners what they want, and in commercial radio really we have
to listen to our listeners; then we have to embrace what they
tell us they want and deliver that to them. There are lots of
examples; stations like Classic FM but small local stations as
well.
Ms Kerr: I think it is very interesting
that even if you do prescribe in some detail the way in which
stations should deliver public purposes, I am thinking, for example,
of news, actually stations overprovide. We did a survey, about
18 months ago, and found that about 65% of commercial radio stations
deliver more local news than their format requires, and actually
commercial radio station formats are pretty prescriptive and pretty
onerous about the amount of local news that should be provided.
To go over and above that in 65% of cases we think is a really
clear indication of the way, as Darren explained, public service
content is about connecting with your listeners.
Q63 Chairman: When we have examined
television, we have talked in terms of market failure, the public
service broadcasting obligations necessary to fill a gap the market
would not provide. You are suggesting almost that actually, as
commercial entities, it is in your interest to provide what is
described as public service content, in which case do we need
to oblige it at all?
Mr Cooper: I think we are arguing
that it should be recognised as a contribution rather than being
legally prescribed in the way it is for television. I congratulate
you, Chairman, on having these sessions about radio because it
is not something that is in the legal definition of public service
broadcasting, so the Committee is to be congratulated on bringing
it in.
Mr Stewart: For small local stations,
really that is our USP; the fact that we are local and providing
local content and connecting with that local community drives
the listeners to small local stations, therefore there would not
need to be a legal requirement. In fact, our audit, which we commissioned,
showed how we are overproviding in our commitment and views on
localness and that there is no necessity really to legislate for
it.
Q64 Mr Sanders: Other than news,
what distinguishes local commercial radio in this country; what
makes it local, other than news?
Ms Kerr: What we measured in our
audit, which is about the stuff you can actually measure as opposed
to the stuff to do with the feeling of a radio station, is to
do with news, weather, travel, `what's on', community interaction,
fund-raising, getting out and about to community events, web and
other content. Those were the particular areas that we measured
and we tracked, and we noticed, for example, significant increases
in a number of those areas between one audit we did in 2000 and
the next audit we did in 2004. Those are the sorts of measurable
aspects of some of the PSC that our industry provides. The stations
themselves, and Darren and Kevin are much better than me at this,
have lots of other ways of connecting with their audiences which
make those stations unique.
Q65 Mr Sanders: Concerning the news,
if you drive from Cornwall to Scotland the only difference between
these local stations is the news; the play-lists are almost identical.
In a sense, one wonders whether there is such a thing as a local
radio station any more?
Mr Stewart: I would disagree strongly
with that statement. I think that is quite a generalisation. Certainly
the stations that I run in East Anglia, if you were to listen
to the play-list of North Norfolk Radio compared with that of
Dream 100 in Colchester, they are very different in terms of the
amount of, for example, 60s or 70s music, and I do not think the
localness is just in the news. My brief to my programme controller
when we started our new Ipswich station was that "If we cut
this station open, it's like a stick of rock and it will say `Ipswich'
all the way through it." It is what the presenters talk about
in-between their links; it is the news, it is the songs, it is
just generally between the records talking about the town. I tell
my presenters always "Your preparation for your show is out
there in the street, not on the internet or cutting things out
of the local newspapers."
Q66 Mr Sanders: What you are saying
is, that is true in your area but it is not true of other commercial
radio stations?
Mr Stewart: I think it depends
how small or large you are; the smaller the station the more it
super-serves that local community. Therefore, the way that you
measure the public service element of it depends in terms of scale
of that station.
Q67 Mr Sanders: If you are distinguishing
that in your patch you have this distinctive local radio station,
you must be comparing that against other commercial stations where
that is not true. I drive across the country and I cannot distinguish
between one radio station and the other, except by the news?
Ms Kerr: Can I pick up on this
music point, because I think it is important to understand that
if a local radio station's objective is to target as many people
as possible within the local area between, say, ages 25 and 44,
a big bulk of what that radio station is going to be playing is
music. In order to attract the maximum number of listeners to
that station, in order to get the maximum amount of advertising
in, in order to fund the important public service content, you
need to appeal to the widest possible range of people within the
target age group. That will mean that you need to play a very
popular range of music. There will be some regional variations,
we accept that, and I think Kevin has pointed that out, but, by
and large, if you want to appeal to the maximum number of 25 to
44 year olds, whether you are in London or Manchester or Birmingham,
in the core of your music content there are some key rules that
we know will work. If you do not abide by those you will not get
the maximum number of listeners in to access the public service
content which we are providing between the records, and it is
the bits between the records which make the difference.
Q68 Mr Sanders: Where is the local
radio for the over-45s?
Ms Kerr: In commercial radio,
we have been taking some significant risks in that area. For example,
Saga Radio has launched services for older listeners.
Q69 Mr Sanders: That is not local,
is it?
Ms Kerr: It is local actually;
it is regional but it is local in a licensing sense. There are
a number of other services, such as the GMG stations, Real Radio,
which are targeting older listeners as well.
Q70 Alan Keen: If Adrian left his
radio on as he approached Heathrow, in my constituency, he would
notice the difference. Is it different, or should it be different,
where you have got, for example, a large Punjabi community listening
to Punjabi radio, should it be more prescriptive in that, public
sector broadcasting; does it matter?
Mr Cooper: You would have to ask
those communities what they are looking for. I think the same
sort of audience-serving forces would operate on an ethnic basis
as they operate on a geographical basis for local radio stations
or on a type of music basis for stations like Classic FM or theJazz,
so I think you get the same forces causing those communities to
gather round their station. One of the issues for us, when we
are running stations for a broad community, is how you serve that
broad community on one station when they may wish to go for a
particular station which super-serves their needs. That is something
which you wrestle with all the time, should you be all things
to all people or should you be just one thing for one community,
and commercial radio is very good at providing that balance in
its various, different proportions.
Q71 Rosemary McKenna: It is a bit
of a chicken and egg situation; what comes first, the radio station
playing what the listeners want or the radio station persuading
the listeners that this is what they want to listen to? I think
that argument has been going on for a long time. I remember, during
the Communications Bill, there was a very strong push by the music
industry, quite rightly, I agreed with them, on local music, stations
promoting young talent within their own local area and therefore
giving them a much wider airing. How much time do you spend doing
that?
Ms Kerr: That is not something
that we have been able to measure yet. I think, anecdotally, we
hear a lot about the support that local radio stations are giving
to bands and I know Xfm, in London, in particular, Simon, if you
can pick up on that.
Mr Cooper: Xfm in London, and
more particularly in Manchester actually, where you have got more
of a music community that is identifiable for its locality rather
than being there in the capital, does a lot to promote new bands.
It depends how new you want them to be, because we start even
at school. There is a programme called Rock School, which
takes kids' bands of secondary school age, and takes them through
a training programme and makes them into stars. That is where
the new music comes from, and pop music stations, and indeed Classic
FM as well, understand that you need to be for ever bringing new
music onto the airwaves to keep things fresh and interesting.
Mr Stewart: Certainly from my
group's point of view, I think this is fairly typical. We run
an unsigned feature on Radio Norwich and on The Beach; in fact,
the mum of the two brothers in The Darkness still brings in cakes
for the presenters at The Beach for getting them their first break
on radio. Across the country we do work with local bands, and
certainly at my Ipswich station we have had acoustic sessions
coming in from day one. I think generally stations do work in
that way.
Q72 Rosemary McKenna: Clyde, in Scotland,
have a very good record of promoting; maybe that is why some of
our bands are doing so very well at the moment because they are
promoting them. Can I move on though to the localness aspect:
is there too much regulation, do you think, that you should be
providing local content, regardless of whether it is news, local
affairs or music? Is the regulation too much and would you like
a lighter touch?
Ms Kerr: We are a very small industry.
The whole commercial radio industry is about the size of a couple
of the biggest local newspaper companies in the UK, and we think
we are pretty overregulated, given our size and, frankly, our
relative impact in the market-place. We have talked already about
how much we deliver over and above what is in our formats. I think
what we have tried to explain, in doing that, is that we are not
local because a regulator tells us to be local, we are local because
that is the only way we will connect with our audiences. Where
we have a problem is when we are told how to be local, where our
stations should be, guiding us on when our journalists should
be employed, detailed prescriptions about the ways in which programmes
should be made. We still have a threat hanging over our industry
about the extent to which we can use computer technology. We have
been given a kind of stay of execution, that we are allowed to
use computer technology in a particular way, but the regulator
can still say, "Well, if we're not content we can bring in
new rules on that." I think we should give Ofcom credit,
that it has undone a lot of the unnecessary regulation which was
put in place by the previous regulator. However, given the challenges
we face, competing going forward with other media, given the importance
we attach to migrating our public service content to new platforms
and the very significant investment we are going to have to make
in new platforms, and in a sense radio is going to have to invest
in more platforms, more than any other media, because radio's
strength is its ubiquity, if we are not on every platform then
we will lose our unique selling point to our listeners. If we
have got all this additional investment to make and we are being
hamstrung as to how we go about connecting with our listeners
then I think we will have some significant challenges going forward.
Mr Cooper: I think the unintended
consequence of regulation is that you tend to tick the boxes which
the regulator has decided are important. I think the most important
part of localness is to have the radio stations operating in their
communities, and rather than just reflecting what is going on,
covering the local news and really without any action resulting,
they should be getting involved in their local communities and
doing things. Two of GCap's stations have been involved, unfortunately,
in the closure of the car industry in the UK, with Rover in Birmingham
and Peugeot in Coventry. Both of those stations ran campaigns
to find new job vacancies for the people who were being thrown
out of work and found new training for them as well. That is a
positive economic consequence of local radio reacting to what
is going on in its community rather than just reflecting it. When
the Suffolk murders happened, I know Tindle's stations did some
very good things there.
Mr Stewart: Actually, the strange
thing about it is, in terms of how we reacted to the Suffolk murders,
Town 102, my station, is relatively new, GCap's station, SGR,
is the heritage station and independently we both did exactly
the same thing, which was to beef up our 'phone content and advise
listeners and have guests in, on air, to advise, because, in fact,
Ipswich was pretty much a ghost town and people were very scared
to be out on the streets, doing their Christmas shopping. Independently,
we both were giving out personal attack alarms on the streets
and safety cards, which were distributed to a lot of the female
population in Ipswich and the surrounding areas, and we did this
without talking to each other, we both actually went out; and
there is a cost to it but it ties us to our listeners. Actually
the GCap station has a slightly younger position than Town 102,
which is my station, so between us probably we covered from 15
up to 60 year olds. Both of these stations, it is an example,
we did not actually talk about it, we both knew that was what
ties us to our audience, and that is real localness; we were on
air, out and about and providing that information via the internet
on our websites.
Q73 Rosemary McKenna: You are saying
that localness is of key importance to you for your audience.
Is there a cost to the regulation for localness?
Mr Stewart: There is a cost to
providing localness and that is part of our business plan. What
we do not need and what does not help is prescribing how we should
deliver that. I think really that is up to us how best to work
out the most cost-effective way for us to deliver that localness.
During the Suffolk murders we tied up and prepared a lot of reports
from our Norwich station to help bolster the efforts of our Ipswich
newsroom, basically because our journalists were at full stretch,
and we were able to tie in a sister station up in Norwich, they
understood the area, they are journalists, they are perfectly
capable of writing the stories and turning them round for Ipswich.
Having too much prescriptive legislation, saying "This is
how you must deliver your localness" I do not think is helpful
at all. We know our industry. I think we can demonstrate that
we deliver, in many cases, far more localness than does the BBC,
and probably we could do more if some of the shackles were taken
off; we do not need it.
Q74 Rosemary McKenna: Has community
radio had any impact on you? I have a local radio station in my
constituency, Revival Radio, and it seems to be growing in popularity.
Is it having any effect on the industry?
Ms Kerr: We believe it is a bit
too early to tell. Although many community stations have been
licensed, not many are yet on air. Although there is going to
be a review of community radio, as part of Ofcom's "future
of radio" project, we believe that it is too early yet to
assess the impact on our sector.
Q75 Adam Price: Two local radio stations
recently have handed back their licence; do you think that was
partly to do with the regulatory burden to which you have just
referred? Would you like greater freedom to syndicate popular
shows across a network of local radio stations?
Ms Kerr: I am sure the individual
owners of those stations which handed back their licence would
want to write to the Committee and give some detail perhaps on
their views. If I can speak generally, the sizes of stations which
did hand back their licence, they are very small stations and
they are the stations which will feel the burden most acutely
of the regulations we have in place as a result of the localness
obligation in the 2003 Act; they are the ones which are less able
to share costs with other co-located stations. In a sense, those
are the sorts of stations which suffer most as a result of the
very overly-restrictive ownership regime which local radio has;
we have four sets of local ownership rules which we have to get
over in a merger before even we get to the special public interest
test and competition law, in particular. I think those are relevant
issues, but if I may I will invite or encourage those two owners
to write to the Committee.
Q76 Adam Price: On the issue of syndication,
are you able to do that; can you do it?
Ms Kerr: Every station has prescribed
within its format exactly how many hours of locally-produced and
presented programming it must broadcast each day, so stations
have differing amounts of syndication allowed. I am sure that
the extent to which you syndicate or share programming across
stations should be a decision for stations. We have explained
already, I hope convincingly, why if we are not connected with
our communities locally we will not survive commercially. If we
want to counter-balance, to complement, to spice up our schedules
with the odd bit of syndication where we share things across,
we think that should be a decision for station management and
a careful judgment. Frankly, if local stations do not provide
the right balance of localness and syndication then they will
not survive, so we would like that decision to be left to station
owners.
Q77 Philip Davies: Following on from
what Rosemary said, I heard the point you were making about it
being too prescriptive how you deliver local content; what I was
not entirely clear about is, if these requirements were taken
away, what you would do differently, if anything?
Mr Stewart: I think it gives us
the freedom, especially where you have adjacent stations, to share
the resources better across stations, so being able to look at
how you deploy your journalists, look at how you deploy your broadcasting
staff; that would help enormously.
Q78 Philip Davies: You would employ
fewer people; that is what you are saying?
Mr Stewart: No.
Ms Kerr: You may deploy them at
different times of the day and in different places.
Mr Stewart: Probably we would
deploy them differently. I do not know whether we would employ
fewer people; you might employ more, in some respects. It is always
shifting sands, to be honest. The most difficult people to employ
in commercial radio are sales people, believe it or not. In terms
of journalists, they tend to work better when you have got two
or three journalists working together and also that is better
with broadcasters; if you have got them in too many small, isolated
little units, you tend to double up on a lot of effort and administration
and all these sorts of things. When they are working together
you get a better creative pool and they are able to share ideas
and work together; so certainly I see that as a benefit, and I
have two caps, so to speak.
Mr Cooper: I think also it allows
journalists in their individual careers to specialise more. To
take the motor industry example, the people (BRMB in Birmingham)
who covered the closure of Rover gave a lot of advice to the people
in Coventry who were covering Peugeot's troubles. It would have
been much simpler, from the career point of view, just to allow
the people in Birmingham to go over to Coventry and work there,
but the regulations get in the way of that type of flexibility.
Ms Kerr: I think it simply comes
down to whether you want to define an industry by the way it goes
about producing its content or by the content it produces. We
believe that, you can become a product of your regulation, you
think in a particular way, because, as Simon said earlier, you
are ticking certain boxes rather than being able to focus on competing
in an incredibly different world from the one that we were looking
at even in 2003.
Mr Stewart: I will give you a
very quick example. I did The Breakfast Show on Island
FM in Guernsey for 12 years and I was known by absolutely everyone
there, we had a 60% reach in that island. In Island FM's format
and using our technology, I could voice-track a programme from
one of my studios in Ipswich for Guernsey and I could be more
local than one of the more junior presenters actually living in
Guernsey. I know more about the Government, I know more about
the people there and I could produce a more local programme from
my radio station in Ipswich, using their technology, than someone
sitting in a studio in Guernsey; and the technology does not allow
me to do it.
Q79 Chairman: Can I put the alternative
case, to Simon, particularly. Certainly it has been put to me
that when a franchise is advertised it is run usually by a local
consortium which makes all sorts of very detailed commitments
about local content and what they are going to achieve. GCap hardly
ever win any franchises; what they do is wait a year and buy up
the franchise which has been awarded to this local group, and
then, over time, the local content diminishes steadily, uniform
play-lists come in, for the less popular hours it is not broadcast
locally at all, it is sourced from somewhere miles away and actually
the GCap stations across the country look remarkably the same
for a large part of the day?
Mr Cooper: To come back to the
music choice question, most of the things which define the nation's
music choice are national things. Top of the Pops, RIP,
was a national programme; obviously all of the television music
programmes are broadcast nationally rather than locally. In the
early days of one of the constituents of GCap, GWR, we introduced
music research to find out what listeners wanted, and another
company did the same thing; we started in Bristol, they started
in Nottingham, and eventually those two companies merged. As you
say, the mergers have been a part of the growth of GCap. We were
stunned, frankly, to find that the music choice in Nottingham,
research using the same software as GWR was using in Bristol,
was exactly the same. In popular music terms, there is a lot to
be done in sponsoring new local acts and getting them into the
music market; that is a different question. In terms of established
acts, the musical taste is formed by nationally-operating factors,
so it is not surprising, I guess, that music across a group of
stations sounds similar if they are all aimed at the same type
of listener, the same age of listener. I would not agree with
your analysis of what GCap does to stations. In the research which
we do to find out why people listen to local radio stations which
GCap owns, and indeed to other stations because we ring people
up at random and of course you get other people's listeners as
well as your own from that process, roughly 50% of the reason
why they listen is because they want to listen to a local station.
If you consider you have the choice of listening to a national
star, like Jonathan Ross or Chris Evans, on a national station,
or listening to your local station, there is a very strong pull
of the localness to cause listeners to listen to the local stations,
which in many areas are the market leaders. We would never throw
away localness. I think maybe what you are identifying is that
the nature of the localness changes, so the half-hour interview
with the local vet about what may be going wrong with the animal
population in the area is probably something which does not attract
a huge number of audience, so that may go; it is not because it
is local, it is because the vet is not very interesting. That
will be replaced by the sort of rolling up the sleeves and getting
involved type of localness, which I was talking about before with
the million pounds of work campaign in Coventry and Birmingham.
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